FC Barcelona to seek approval of 608 million euros in revenues and a budget of 633 million, both Club records

The fiscal year closed with after-tax profit of 15 million euros while the budget forecasts 20 million with a ratio of net debt to EBITDA below the maximum of 2.5 set out in the Statutes

WWW.FCBARCELONA.COM

10:00PM Wednesday 21 Oct

Club

21 Oct 15

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At next Sunday's Members' Assembly, the Club will seek approval of the 2014/15 financial results, which included 608 million Euros of revenue, a Club record, and a profit of 15 million Euros. That brings to 128 million Euros the total profit since 2010. The budget also foresees record revenues of 633 million Euros this season, and a profit of 20 million Euros.

The financial year 2014/15 was marked, both in the areas of revenue and expenditures, by the treble won by the first team.

Marketing revenues increased considerably, surpassing 56 million Euros and representing a 33% increase. The main drivers of this increase were variable revenues stemming from title bonuses paid out by sponsors for winning the treble, as well as new commercial agreements (Telefónica, Beko) and improved contractual conditions with sponsors such as Audi, Damm and La Caixa.

Revenues from the Stadium and other facilities increased by 16%. Participation in and organization of the Copa del Rey Final and final rounds of the Champions League were the chief reasons for this growth, more than offsetting the negative financial impact of not having played the Spanish Super Cup, which is an important source of revenues since it is not included in season ticket packages. Also noteworthy was the increase in revenue from the Museum.

An increase of 39% in sports-related salaries from the previous season, when the football first team did not win a title, this past season the team won the treble, which resulted in an increase in variable sports expenditures of 53 million Euros. Also important was the bonus paid to Xavi Hernández at the end of his contract as well contract renewals signed by Sergio Busquets, Dani Alves, Pedro Rodríguez and Sergi Robert.

Management expenditures increased by 15 million Euros compared to the previous season primarily due to factors such as non-budgeted expenses associated with participation in the Copa del Rey and Champions League Finals and title celebrations. There was also increased spending on legal services.

A relevant fact is that in the last six years, from 2009/10, revenue has grown an average of 8% annually and expenses by just 4%.

Sports-related costs trend

The percentage of Total Club expenses from sports-related salaries (football + sections) increased 8 points, from 65% to 73%, surpassing the 70% threshold. It is important to keep in mind, however, that variable costs were particularly high this season due to winning the treble. In calculating this percentage, the figure Total Club sports-related salaries includes salaries of players and coaching staff, variable titles bonuses, image rights, sports agents, social security, and amortisation of player contracts.

We have broken down the figures, considering both the total (football + sections) as well as football only (first team and youth teams, without the sections). If the analysis is limited to football, the ratio stands at 66%, within recommended levels

Debt

The results mentioned above, along with the significant investment in player acquisitions (Suárez, Mathieu, Bravo, Vermaelen and, at the end of the season, Aleix Vidal) led to an increase in net debt, rising from 287 million Euros the previous year to 328 million Euros. However, it is important to note that since the 2010/11 season net debt has been reduced by 102 million Euros.

The ratio of net debt to EBITDA stands at 3.24, exceeding the maximum of 2.75 set out in the Statutes for this season. The forecast for the coming season, with lower costs for player acquisitions and achieving an EBITDA of 120 million Euros, places us below 2.5, which will allow us to comply with the established equity balance ratio and continue reducing debt in line with recent years

Net financial debt (loans + bank guarantees + deferred payment obligations for player acquisitions – liquid assets) is 85 million Euros, more than fulfilling the obligations of the syndicated loan agreement with the banks, which will be concluded next summer.

Regarding liquid assets, the Club closes the fiscal year with 76 million Euros of cash on hand, having decreased bank debt by 21 million Euros (from 73 million to 52 million), being on 30 June up to date with its obligations, and having no outstanding public debts.

The Club’s net equity increased and now stands at 69 million Euros. The Club’s assets have been strengthened by investing 16 million Euros in sports and social facilities, computer systems and other assets, the highlights of which include the new pavilions at the Ciutat Esportiva, IT and Wi-Fi projects, and the beginning of the Espai Barça projects.

2015/16 Budget

Revenue is expected to increase by 4% to a record 633 million Euros with expenses of 599 million Euros. This puts the budgeted operating profit for the 2015/16 season at 34 million Euros that, when including net revenues and taxes, represents an expected after-tax profit of 20 million Euros.

The biggest growth comes from the Marketing area, in line with on-going efforts at internationalisation and an increase in brand value with a target increase of 25 million Euros.

Despite the new additions of Arda Turan and Aleix Vidal and contract renewals of players and coaches, sports-related spending decreased compared to the previous season since the football budget is based on the hypothesis that, like every year, we win La Liga, get to the quarter-finals of the Champions League, and get to the semi-finals of the Copa del Rey. However, these player additions also result in higher amortisation costs.